International Executive Service Corps technical assistance to business

The evaluation covered the period 4/89-11/91, one month before the PACD. IESC came close to meeting its target of 40 subsidized TA interventions, having completing 31 with 3 more in process. Of a targeted 20 nonsubsidized interventions, 13 were carried out. However, IESC did not meet project goals of assisting primarily small- and medium-sized firms, reaching only 6 small enterprises and no microenterprises. Most clients fell into the lower range of "large" as defined by the project agreement, and most were manufacturing firms serving the domestic rather than the export market. In several cases, subsidization was granted to firms that were technically not qualified under the terms of the agreement. The project faced problems in identifying demands. IESC could not depend on firms to apply for assistance and so had to market its services actively. Once an application was accepted, the process proceeded quite smoothly, and there were few delays in the arrival of volunteer executives. Clients were also generally satisfied with services received. Some communication problems arose, since most volunteers spoke only English, and some firms had difficulty in absorbing the TA. Although the impact of TA appears to be favorable, monetary benefits were mainly in the form of cost savings in the production process and did not translate into employment generation or expanded exports. Unless modifications are made by IESC, the developmental benefits would not justify a follow-on project. Lessons learned include the following. (1) The need for and benefits from TA are not well understood among most Latin American firms. (2) The impact of firm- or product-specific TA is not readily quantifiable. (3) Short-term TA can be an effective instrument, but is of limited application. (4) Larger, technically oriented firms are more apt recipients of TA than smaller firms. (4) In terms of the Mission"s private enterprise portfolio, the IESC program can benefit the industrial reconversion, export development, and, possibly, the financial institutions strengthening programs. It has not proven effective in privatization and does not appear suitable for small and micro enterprise development.